What is credit protection insurance?
Credit protection insurance (also called consumer credit insurance) covers your credit card, home loan or personal loan debt and repayments in the event of your death, terminal illness, disablement or unemployment. It is generally available with a mortgage, personal loan or credit card, is optional and in no way connected to mortgage insurance, which is usually compulsory if you have a home loan deposit of less than 20%. It tends to be offered as a package, such as combined disablement and unemployment covers. If your claim is accepted, your debt is usually covered in the case of death or terminal illness and the repayments for disablement or unemployment. However, there are plenty of hidden catches and traps. Why is credit protection a rort? • It’s very expensive: for a similar premium you can buy $500,000 life insurance or credit protection insurance worth only $2500. The life insurance policy would leave your family 200 times better off in the case of your death. • Only 1% of policy
Credit protection insurance (also called consumer credit insurance) covers your credit card, home loan or personal loan debt and repayments in the event of your death, terminal illness, disablement or unemployment. It is generally available with a mortgage, personal loan or credit card, is optional and in no way connected to mortgage insurance, which is usually compulsory if you have a home loan deposit of less than 20%. It tends to be offered as a package, such as combined disablement and unemployment covers. If your claim is accepted, your debt is usually covered in the case of death or terminal illness and the repayments for disablement or unemployment. However, there are plenty of hidden catches and traps. Why is credit protection a rort? * It’s very expensive: for a similar premium you can buy $500,000 life insurance or credit protection insurance worth only $2500. The life insurance policy would leave your family 200 times better off in the case of your death. * Only 1% of policy
